The shareholder groups allege that the bank misled them on the
true state of the bank's finances when raising money through a
share issue in 2008. RBS raised £12 billion through a rights
issue in April 2008 but required what became a £45 billion
bailout from the government in October of the same year.

RBoS Shareholder Action, one of the group's taking action against
RBS, claims the
bank "acted improperly by misrepresenting the underlying
strength of the bank at the time and by omitting critical
information from the Prospectus. This led to tens of thousands of
shareholders taking part at an over-inflated price."

While only three of the five groups have agreed to settle, RBS
says the £800 million is earmarked for all the claimants. The
£800 million is covered by existing settlement provisions.

CEO Ross McEwan says in an emailed statement: "We have been very
clear that we wanted to deal with as many of our legacy
litigation issues as possible during 2015 and 2016. We are
pleased to have reached this agreement and hope that it will be
accepted by the remaining claimant group(s) so that this long
course of complex and costly litigation can now be concluded."

RBS says the settlement is "to minimise further material
litigation expense and management distraction and without any
admission of liability." It adds that it will "continue to be
vigorously defended" if the two outstanding shareholder groups do
still decide to pursue legal action. A court date for the
remaining two claimant groups in in the case is set for March
2017.

Shares in the bank initially opened slightly higher in London on
Monday, but are now down slightly after around 20 minutes of
trade:Investing.com